Notwithstanding the relatively rosier employment picture of recent months (and there are still many thorns hidden in that employment data), the legacy of business failures, bankruptcies, and layoffs from the Great Recession is still with us and serves as the motivation behind many ongoing employment lawsuits. In a recent Wall Street employment lawsuit, a veteran registered person brought charges of age discrimination and breach of contract against his former employer Bank of America and Merrill Lynch. When reading through the facts and Plaintiff's allegations, you sort of get the sense that this may have been a slam dunk of a case. The courts, however, did not agree. Buried within the disconnect between a former employee's outrage and a former employer's perception of acting within its rights are a number of warnings and lessons for many registered persons and member firms.

A Career Begins

In 1988, John Delaney started employment with predecessors to the Bank of America and by 1996, he was working for NationsBank in its High Yield Sales Group. After NationsBank merged with Bank of America in late 1998/early 1999, Delaney continued to mainly sell high-yield products through the High Yield Sales Group ("HYS Group"). In 2006, he had been transferred to the newly formed Fixed Income Middle Markets Sales Group ("FI Group"), where he was expected to sell a larger array of products beyond HYP.

2005 Transfer

Notwithstanding Delaney's 2006 transfer from the HYS Group to the FI Group, it appears that he remained in the same physical office location despite being assigned to a different line of reporting. Additionally, his compensation was subject to that of the Middle Markets Sales Compensation Plan, which took into account his production credits as the basis for his annual salary and quarterly compensation. For the year 2009, Delaney's commissions exceeded $1.6 million and he received an "exceeds/meets" expectations ratings for his annual performance review.

A Reward Or A Reorg?

In March 2010, Delaney was transferred from the FI Group back to the HYS Group. Consistent with the game of musical chairs that so often occurs at large organizations, Delaney apparently never actually was physically relocated but remained at the same premises during this back-and-forth from one group to another and back again. Notably, he received two additional accounts for his March 2010 transfer.

If you had asked Delaney what was behind the reassignment, he would have indicated that it was a "reward" of outstanding work in developing middle markets accounts. Moreover, he was under the impression that his employer had guaranteed that his compensation would not suffer because of the transfer because he would be given additional accounts to ensure a consistency of production credits.

In contradistinction to the explanation for the transfer offered by Delaney, his employer would likely have ascribed the move to an overall institutional re-organization mandated by the onset of the Great Recession - which, among other things, prompted the removal of all High Yield staff from the Middle Markets Sales Group (which would eventually be closed in 2012).

Going Negative

In July 2010, Delaney was given a negative mid-year performance review, which cited his 7% decrease in production that unfavorably contrasted with the HYS Group's 20% increase for the same period. The employer admonished, among other things, Delaney's sales skills and "difficulty multi-tasking."

The following month, wouldn't you just know it, but a company-wide reduction in force ("RIF") was announced and the HYS Group started to select so-called under-performing employees for dismissal.

By September 2010, Delaney was ranked 136th among all Bank of America sales personnel and was the worst performer in the High Yield Sales Group. All of which may explain why he was listed among 418 bank employees for RIFing.

Side Bar: Delaney's performance was being rated within a few months of his recent transfer, and, moreover, that relocation transpired during the worst recession in recent history. Additionally, at 56 years old, Delaney was the oldest member of the High Yield Group and the only group member to be terminated.

Consequently, you can almost see the collision coming. On the one hand, we have an employer seeking to slash payroll in response to an overall economic deterioration and looking to lop of those it deems as under-performing or unproductive. On the other hand, such staffing decisions are not always undertaken in a pristine manner and management may see an opportunity in hard times to ween out veteran employees with higher compensation and benefits packages under the pretext that a falling tide lowers all boats and, gee, sorry but, you know, it's nothing personal.

SDNY granted Defendants' Bank of America and Merrill Lynch's Motion for Summary Judgment. Defendants argued that Delaney had failed to present facts that would give rise to an inference of age discrimination and, in the alternative, Defendants had demonstrated a legitimate, non-discriminatory reason for Plaintiff's termination.

In considering Delaney's age discrimination claim, SDNY noted that:

In the end, Delaney is left with the fact that he was the oldest employee of High Yield and the only one terminated. But, as noted, as a matter of law, that alone is insufficient to make out a prima facie case of age discrimination. Based on the admissible evidence before the Court, no "fair-minded jury" could find that Delaney's termination occurred under circumstances giving rise to an inference of discrimination based on age, without engaging in "unsubstantiated speculation." . . .

. . .

Even assuming arguendo that Delaney had made out a prima facie case of discrimination, BoA has met its burden of production by articulating a legitimate, nondiscriminatory reason for his termination: It has explained - and supported by corroborative documentary and testimonial evidence that Delaney does not counter - that it terminated Delaney as part of a reduction in force "("RIF"), and Delaney was selected for the RIF because he was the lowest performing member of the High Yield Sales Group. . .

Pages 13-14 of SDNY Opinion

Separately, SDNY dismissed Delaney's contention that the RIF was merely a pretext for dismissing him and that his performance evaluations were, at best, bad faith efforts to cynically support such a move. SDNY noted that:

Accordingly, although Delaney is free to take issue with BoA's assessment of his performance, his disagreement does not, under the circumstances, show that the review was a pretext for age discrimination . . .

Page 21 of the SDNY Opinion

Finally, as to Delaney's contract claim, SDNY recognized that:

[F]rom Delaney's s perspective, being terminated less than a year after his transfer into a new group, based on his inability to meet the group's production goals, may seem harsh. But Delaney was an at-will employee whom BoA was entitled to terminate for any reason not proscribed by the law, and the ADEA "do[es] not permit courts to inquire about the wisdom or fairness of [a defendant's] business decisions, except insofar as those decisions may reflect impermissible discrimination." Azzolini v. Alitalia Airlines, No. 90 Civ. 3392 (LLS), 1991 WL 243380, at *5 (S.D.N.Y. Nov. 13, 1991); see also Freeman v. Package Mach. Co., 865 F.2d 1331, 1341 (1st Cir.1988) ("ADEA does not stop a company from discharging an employee for any reason (fair or unfair) or for no reason, so long as the decision does not stem from the person's age."); Slatky v. Healthfirst, Inc., No 02 Civ. 5182 (JGK), 2003 WL 22705123, at *5 (S.D.N.Y. Nov. 17, 2003) ("The employer could terminate the plaintiff for a good reason, a bad reason, or no reason at all, so long as it was not a discriminatory reason. . . . Moreover, it is not for the Court to second-guess the business judgment for a termination, so long as there is no evidence that the reason for the decision was a pretext for discrimination."

[T]he record contains no evidence of a conversation concerning the transfer of specific accounts to Delaney as part of his move from Middle Markets to High Yield. Finally, with respect to his bonus compensation, the district court correctly determined that Delaney was an at-will employee and that although annual bonuses were discretionary, there is no record evidence, or even an allegation, indicating that Delaney was promised a mid-year bonus. We thus affirm the dismissal of Delaney's breach of contract claim for substantially the same reasons as did the district court.

Page 13 of the 2Cir Opinion

The 2Cir makes clear that a RIF presents a very potent counter to mere allegations by any plaintiff (particularly an at-will employee) that he or she has been victimized by discriminatory practices. Although 2Cir goes to some pains to clarify that a RIF is not the be-all-and-end-all in terms of advancing an employer's defenses against discrimination claims, the impact of this type of corporate layoff is to provide employers with a potent if not frequently insurmountable defense -- in more vernacular terms, the RIF provides one hell of a "Yes, but . . ." excuse. Consider 2Cir's commentary:

We agree with the district court that BoA has satisfied its burden to articulate a legitimate, nondiscriminatory reason for Delaney's termination. We have previously held that a RIF constitutes a legitimate, nondiscriminatory reason for termination of employment. See, e.g., Roge v. NYP Holdings, Inc., 257 F.3d 164, 168-69 (2d Cir. 2001); Carlton v. Mystic Transp., Inc., 202 F.3d 129, 136 (2d Cir. 2000). Here, BoA has explained that Delaney's employment was terminated as part of a company-wide RIF to eliminate positions that generated insufficient value and that could be eliminated with little impact to the company's functioning and further that Delaney was selected for termination based on his poor performance. Specifically, the record evidence shows that two months prior to his termination Delaney received a negative mid-year performance review that raised concerns about his productivity level. Moreover, the evidence indicates that in September 2010, Delaney was ranked 136th across all BoA sales personnel for the year and his performance in the High Yield group was the worst of all employees at his level.

Page 7 of the 2Cir Opinion

In an effort to explain the rationale for its rejection of Delaney's breach of contract claim, 2Cir offered, in part, this basis:

Moreover, Delaney's deposition testimony undermines any allegation that the contract terms were definite:

Q. Was there any discussion about your compensation if you were to transfer into high yield sales, institutional accounts desk?

A. Not specifically.

Q. That answer makes me ask, was there a discussion generally?

A. Well, simply that I would move from the commission basis

of being paid to the salary/bonus structure.

Q. As far as the salary/bonus structure, were you told a specific

salary that you would be earning?

A. No. But there was no change.

Q. There was no change from where you were in middle

markets?

A. Yes.

Q. What about the bonus, was there any discussion about what

bonus you would be paid?

A. Not specifically.

Q. There was no guarantee of a bonus, correct?

A. Right.

Page 12 -13 of the 2Cir Opinion

Bill Singer's Comment

In my own law practice, I frequently field queries from potential clients claiming that they were wrongfully discharged for reasons typically involving their race, age, or sex. During my conversations with such folks, we tend to spend significant time discussing the entire "at will" employment doctrine, and often discuss the ramifications of the "business judgment" rule. As made clear in Delaney, those two issues often become death knells in many employment lawsuits.

If you are considering filing a discrimination lawsuit against your employer, carefully consider the courts' admonitions noted above. Unfair as it seems,courts do not tend to overly extend themselves when delving into the nuts-and-bolts of how the class of folks who got RIFed was actually determined. As I suspect is often the case, when a large organization announces to its managers its intention to pursue a RIF, many of those tasked with coming up with the names of subordinates to be axed often see this as an opportunity to get rid of older workers, women, and minorities. No -- I am NOT suggesting, not even remotely, that this is a universal policy or practice; however, what I am suggesting is that you would have to be a moron to argue that such improper factors do not creep into far too many selections of employees to be RIFed. Yeah, I know, there are lots of morons out there.

In Delaney, there are compelling factors and arguments on each side of the litigation docket. You have what seems like an employee who got a raw deal in a recent transfer. There will always remain that unsettling fact of his age and how he (the oldest employee in the group) was the only employee in his group terminated. The oldest. The only.

Stacked up against those favorable points for Delaney are the facts that he was terminable-at-will, that he was RIFed, that his employer was entitled to make a reasonable business judgment, that his production was terrible, and that he purportedly lacked persuasive proof of his discrimination and the alleged breach of contract.

In the final analysis, Delaney clearly explains the hurdles and obstacles facing employees seeking redress for alleged employment discrimination. Nothing in this article or even the opinions of the two courts should be interpreted as meaning that there are no set of circumstances that will ever result in a victory for a discriminated-against employee. That is simply untrue and there are many victories to demonstrate that. What this case does note, however, is that even if you can prove you were the oldest employee in your unit and you were the only one fired, that those factors, in and of themselves, may not be enough to win the case.

BILL SINGER is a lawyer who represents securities-industry firms, individual registered persons, Wall Street whistleblowers, and defrauded public investors. For over three decades, Singer has represented clients before the American Stock Exchange, the New York Stock Exchange, the Financial Industry Regulatory Authority (formerly the NASD), the United States Securities and Exchange Commission, and in criminal investigations brought by various federal, state, and local prosecutors. He has the distinction of representing witnesses during Congressional investigations. In 2015, Singer achieved a significant award in excess of $1 million from the Securities and Exchange Commission on behalf of a whistleblower client.

Singer is presently Of Counsel to a law firm and the publisher of the BrokeAndBroker.com Blog, which was rated as one of the industry's top eight destination websites and the leading legal/regulatory blog by "Investment News."

Before entering the private practice of law, Singer was employed in the Legal Department of Smith Barney, Harris Upham & Co.; as a regulatory attorney with both the American Stock Exchange and the NASD (now FINRA); and as a Legal Counsel to Integrated Resources Asset Management. Singer was formerly Chief Counsel to the Financial Industry Association; General Counsel to the NASD Dissidents' Grassroots Movement; and General Counsel to the Independent Broker-Dealer Association. He was registered for a number of years as a Series 7 and Series 63 stockbroker.

Singer regularly appears as a commentator on television and radio, and is frequently quoted in the press. He is an outspoken critic of ineffective regulation and an advocate for economic and political sanity.